My response to a great article by Martin Wolf in the FT on 6/16/2015 which you can read here.
Excellent article by Martin Wolf, but not really too revealing on what the options might be.
Governments are responsible to their voters, not to the holders of the country's national debt. When you look at that chart of real domestic demand at around 68 percent of where it was in 2008, you also understand that the Greek government needs to stick to its guns this time.
The sad thing is that these negotiations have not allowed any latitude for new measures, such as perhaps the conversion of some of the existing debt to consols, or the future sale of some Greek assets (Mykonos?) - they have almost exclusively focused on extracting further austerity measures from the Greek negotiators.
Given the lack of any imaginative initiatives on the part of the negotiators, the unsuitability of Greece for belonging to the euro area (due to it not satisfying the optimal currency area criteria), as well as it not properly fulfilling the Maastricht criteria for joining the euro in the first place, the Greek government now needs to plan its exit from the euro.
Despite Mr. Wolf's concerns about Grexit, I really don't think these specific circumstances apply to any other euro area member states, so the prospect of any contagion is minimal.
The really sad thing is that this whole Grexit thing has been kicked so far down the road as far as it has. The can is looking pretty crushed and deformed now, having been kicked so much - so now is the time to take the can off the road and put it in the garbage, or recycle it!